Thursday, August 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S.
stock indexes are pointed toward slightly higher openings
when the New York day session begins. Traders and investors
worldwide remain generally upbeat and risk-averse.
Traders are awaiting this morning’s U.S. jobs report for
July. Wednesday’s ADP national employment report for July
showed a rise of 219,000. That number was higher than the
expected rise of 185,000. The non-farm payrolls number
today is forecast to come in at up 190,000. The stronger
ADP number suggests today’s figure could come in higher,
too. Look for more active trading in the immediate
aftermath of the jobs report. However, it’s also prime
vacation season in the U.S. and Europe. Trading could well
continue to be generally lackluster until after the U.S.
Labor Day holiday.
In overnight news, the Euro zone services purchasing
managers index (PMI) came in at 54.2 in July, which was
just below market expectations. A reading above 50.0
suggests growth in the sector.
The Chinese currency, the yuan, fell to a 14-month low
against the U.S. dollar today. While the depreciating yuan
helps out China’s trade surplus, it also risks domestic
capital outflows from the country.
The key “outside markets” today find Nymex crude oil prices
slightly lower and trading just below $69.00 a barrel. The
U.S. dollar index is slightly higher early today and is
near its 12-month high scored a few weeks ago.
Other U.S. economic data due for release Friday includes
international trade in goods and services, the U.S.
services PMI, the global services PMI and the ISM non-
manufacturing report on business.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in
early U.S. trading. The bulls have the firm overall near-
term technical advantage. The shorter-term moving averages
(4-, 9- and 18-day) are neutral early today. The 4-day
moving average is even with the 9-day. The 9-day is above
the 18-day moving average. Short-term oscillators (RSI, slow
stochastics) are neutral early today. Today, shorter-term
technical resistance comes in at the July high of 2,849.50
and then at 2,870.00. Buy stops likely reside just above
those levels. Downside support for active traders today is
located at 2,800.00 and then at this week’s low of 2,791.00.
Sell stops are likely located just below those levels.
Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index December futures: Prices are slightly
higher in early trading. Bulls have the overall near-term
technical advantage. Shorter-term moving averages (4- 9-and
18-day) are bearish early today. The 4-day moving average is
below the 9-day and 18-day. The 9-day average is below the
18-day. Short-term oscillators (RSI, slow stochastics) are
neutral to bullish early today. Shorter-term technical
resistance is seen at 7,425.00 and then at 7,450.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at 7,350.00 and then at
7,300.00. Sell stops are likely located just below those
levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer in early U.S.
trading, on more short covering after hitting a nine-week
low Wednesday. Bears still have the overall near-term
technical advantage. Shorter-term moving averages (4- 9- 18-
day) are bearish early today. The 4-day moving average is
below the 9-day and 18-day. The 9-day is below the 18-day
moving average. Oscillators (RSI, slow stochastics) are
bullish early today. Shorter-term technical resistance is
seen at 143 even and then at this week’s high of 143 16/32.
Buy stops likely reside just above those levels. Shorter-
term support lies at the overnight low of 142 9/32 and then
at this week’s low of 141 27/32. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
5.5
September U.S. T-Notes: Prices are firmer in early U.S.
trading, on more short covering after hitting a six-week
low on Wednesday. Bears have the overall near-term
technical advantage. Shorter-term moving averages (4- 9-
18-day) are bearish early today. The 4-day moving average
is below the 9-day. The 9-day is below the 18-day moving
average. Oscillators (RSI, slow stochastics) are bullish
early today. Shorter-term resistance lies at this week’s
high of 119.21.0 and then at 119.25.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at this week’s low of 119.02.5 and then at
119.00.0. Sell stops likely reside just below those levels.
Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher and hit
another two-week high in early U.S. trading. Bulls have the
solid overall near-term technical advantage. The shorter-
term moving averages for the dollar index are neutral early
today, as the 4-day is above the 9-day and 18-day. The 9-day
is even with the 18-day moving average. Short-term
oscillators for the dollar index are bullish early today.
The dollar index finds shorter-term technical resistance at
the July high of 95.440 and then at 95.750. Shorter-term
support is seen at Thursday’s low of 94.420 and then at last
week’s low of 93.870. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early
U.S. trading. Bulls have the firm overall near-term
technical advantage. The shorter-term moving averages are
neutral early today as the 4-day is above the 9-day. The 9-
day is below the 18-day moving average. Short-term
oscillators (RSI and slow stochastics) are neutral early
today. Look for buy stops to reside just above technical
resistance at Thursday’s high of $69.36 and then at $70.00.
Look for sell stops just below technical support at $68.00
and then at $67.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed overnight. U.S.-China trade
worries are pressuring soybeans, but corn and wheat are
supported on good world supply-and-demand fundamentals. The
next big report for the grains is the August 10 monthly
supply-and-demand report. Weather in the Corn Belt is still
mostly benign. No serious weather markets have occurred this
summer and the clock is ticking for such to occur.
IMPORTANT NOTE: I am not a futures broker and do not manage
any trading accounts other than my own personal account. It
is my goal to point out to you potential trading
opportunities. However, it is up to you to: (1) decide when
and if you want to initiate any traders and (2) determine
the size of any trades you may initiate. Any trades I
discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for
everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS.
Before you invest any money in futures or options contracts,
you should consider your financial experience, goals and
financial resources, and know how much you can afford to
lose above and beyond your initial payment to a broker. You
should understand commodity futures and options contracts
and your obligations in entering into those contracts. You
should understand your exposure to risk and other aspects of
trading by thoroughly reviewing the risk disclosure
documents your broker is required to give you.
Jim Wyckoff
